A professional loan is similar to a personal loan in the sense that it is also an unsecured loan that can be used for any purpose as per the borrower’s wish. However, with a professional loan, borrowers need to provide evidence of their professional competency. This is usually a professional degree but borrowers can sometimes offer up their professional experience in the place of professional degrees. Doctors, chartered accountants and company secretaries are eligible to avail a professional loan.
Since a professional loan has an added security of the borrower being a distinguished professional, lenders are generally more willing to give out professional loans. This is because professionals have a strong professional outlook, which signals financial stability.
Additionally, because of the added layer of trust that lenders have on vetted professionals, the interest rates are also lower. This gives professionals an opportunity to avail professional loans at affordable rates.
Here are some advantages of choosing a professional loan over a personal loan:
- Simple Process
If all your qualification, experience and income documents are in place, then your loan application will be processed very quickly and effortlessly. Most lenders also offer fully digital and paperless application and disbursal processes that are approved and sanctioned in less than 24 hours!
- Saves Time and Effort
Since many, if not most lenders offer a fully digital application and disbursement process. You can get through your professional loan application process anywhere, anytime. This will ensure that you don’t have to take precious time off your busy schedule to run around bank branches.
- Minimal Documentation
You’d only need a few important documents that validate your professional qualifications, identity and income. If you’re applying online, you needn’t even go through the hassle of carrying around your documents, you can just upload your documents on the lender’s website.
- Lowered Interest Rates
One of the biggest advantages that a professional has over a personal loan is the lowered interest rates. Generally, lenders offer lower interest rates to professionals as compared to personal loans. This is because lenders believe that those with professional backgrounds are less likely to default as they have job security.
- Negotiating Power
Since you’re offering documentation that validates your educational and professional proficiency, you can now negotiate terms with the lenders. This is because the lender now trusts you to be a high-value customer. You can negotiate lowered interest rates, more flexible repayment options, waiving processing and foreclosure fees.
- Flexible Repayment Options
Professional loans offer much more flexibility in terms of repayment terms than personal loans. Most lenders allow partial repayment at no foreclosure charges. This facility can come in handy in case your earning potential increases and you wish to make bigger contributions to your professional loan repayment.
- Fund your Business Expenses
A professional loan is a great way for you to fund your business or professional expenses, without reaching into your personal finances. You can fund business travels, conferences, seminar hall rents, etc.
- Longer Repayment Tenures
With a professional loan, your loan repayment tenure can be extended up to 5 years, which gives you sufficient time to repay your professional loan without overburdening yourself.
- Higher Loan Amount
Since a professional loan comes with the added security of a borrower who has job security, lenders are likely to offer higher loan amounts as compared to personal loans. You can get a professional loan of a few thousand rupees or a few crores depending on your eligibility and requirements.
- Cost-effectiveness
Although personal loans and professional loans offer similar benefits, professional loans offer lower rates of interest. This makes professional loans a great cost-effective option for you if you qualify for a professional loan.
- Tailor-made Loans
Since professional loans are offered to people belonging to different professions, these loans are often tailor-made to specific professions such as professional loan for chartered accountants, professional loan for doctors, professional loans for architects, etc.
A professional loan is a great way for you to fund your business or professional expenses without worrying about collateral or security. You can take advantage of the lower interest rates that are generally available only on secured loans on an unsecured loan by simply affirming your professional qualifications. A professional loan generally has better terms and lower interest rates because a professional degree signals to lenders that you are a qualified person and are integral to the job market and the economy.
